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Flight to quality for the UK housing market


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If and only if, and we all hope it will happen, we will see the end of this 30 years bubble, I do think we will see a sort of flight to quality with the UK market. 
 

Houses/Flats in a bad state, in bad areas will probably see their prices go to the the floor, if they even manage to sell. 
House/Flats in a good state, in good area, will probably see their prices go down, but around the average fall in the market. 
House/Flats in premium locations will see their price stay flat or even go up. 
 

Now it’s all about the quality of the UK housing stock. Personally, everything built from the 60s until the end of the century is of very poor quality. Cheap houses/flats driven by the councils expenses for the masses. All of the new builds, behind the shiny marketing brochures have awful floor plans, drywalls and are in areas far away from everything. Councils are not going to have the money to develop those areas. It’s a gamble I wouldn’t take. 
 

Buildings in the city centers which survived the blitz will be those coming with the best value, if previous owners maintained them well. Thinking about pre-war buildings. 
 

Worst performer to me will be those detached in not well connected areas. Maintenance is a problem here, and being far away from the main activities could be another problem too. 

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So in a nutshell, if we will see mortgages volumes going down, it will all be about the split of the UK housing stock bad/neutral/good. 
 

If neutral/good cannot satisfy the demand, bad could go down, but not as bad as when good/neutral will provide the houses needed on the market. 
 

if that’s the case, hundreds of millions of UK properties will be valued at 0. 

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7 hours ago, Neapolitan said:

 Now it’s all about the quality of the UK housing stock. Personally, everything built from the 60s until the end of the century is of very poor quality. Cheap houses/flats driven by the councils expenses for the masses. All of the new builds, behind the shiny marketing brochures have awful floor plans, drywalls and are in areas far away from everything. Councils are not going to have the money to develop those areas. It’s a gamble I wouldn’t take. 
 

The suburban housing boom that ran from 1920-30s (low mortgages and a flight from the centre lol) threw up millions of houses, and with cheap mass building came corner cutting. 

Equally the post WW2 building schemes provided work for returning soldiers, so build quality wasn’t a priority. 

I’d take a big 60s/70s build (straight lines, no pointless fireplaces, easy to renovate, big windows) over 30s/40s any day, but I’m in the minority which is why they’re cheaper. Modern estates are the worst of the bunch. 

Most people don’t care or know about that. They want cute houses that fit their mental idea of what a ‘good’ house looks like. Big sash windows etc. A solid Georgian townhouse or Edwardian semi in a nice location will always hold appeal. 

 

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5 hours ago, PeanutButter said:

The suburban housing boom that ran from 1920-30s (low mortgages and a flight from the centre lol) threw up millions of houses, and with cheap mass building came corner cutting. 

Equally the post WW2 building schemes provided work for returning soldiers, so build quality wasn’t a priority. 

I’d take a big 60s/70s build (straight lines, no pointless fireplaces, easy to renovate, big windows) over 30s/40s any day, but I’m in the minority which is why they’re cheaper. Modern estates are the worst of the bunch. 

 

Completely agree. 60s and 70s builds are seemingly the best of the bunch, at least around here. Mostly quite ugly but I rarely see scaffolding on them to sort out subsidence or a roofer climbing sorting out a crap job.

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8 minutes ago, Frugal Git said:

Completely agree. 60s and 70s builds are seemingly the best of the bunch, at least around here. Mostly quite ugly but I rarely see scaffolding on them to sort out subsidence or a roofer climbing sorting out a crap job.

Ugly can be changed. Most people are too unimaginative to do it.

The worst I’ve experienced is asbestos, pricey to remove safely and dispose of properly, and only outlawed entirely in 1999. Mostly I’d leave it undisturbed but for full rewiring and insulating just get the artex (and whatever else) out at the same time.

60/70s housing stock in the UK is good value and it’s easier to modify to suit modern living (kitchen diners, sliding doors onto garden etc). 

I don’t love timber cladding but a nice breathable render does wonders. 

image.thumb.jpeg.be56b94dd96dff60f4f7b15850b62d30.jpeg

 

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1 minute ago, PeanutButter said:

Ugly can be changed. Most people are too unimaginative to do it.

The worst I’ve experienced is asbestos, pricey to remove safely and dispose of properly, and only outlawed entirely in 1999. Mostly I’d leave it undisturbed but for full rewiring and insulating just get the artex (and whatever else) out at the same time.

60/70s housing stock in the UK is good value and it’s easier to modify to suit modern living (kitchen diners, sliding doors onto garden etc). 

I don’t love timber cladding but a nice breathable render does wonders. 

image.thumb.jpeg.be56b94dd96dff60f4f7b15850b62d30.jpeg

 

I doff my cap. I lack both the imagination and the desire to do something like that, but I'm impressed!

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1 minute ago, Frugal Git said:

I doff my cap. I lack both the imagination and the desire to do something like that, but I'm impressed!

Renovating isn’t for everyone. But taking somewhere cheap and ugly and ending up with a place to your specifications is extremely satisfying. You do lose entire days thinking about bathroom tapware finishes though, which is pointless (just go chrome, high quality chrome). :D 

 

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15 minutes ago, PeanutButter said:

Renovating isn’t for everyone. But taking somewhere cheap and ugly and ending up with a place to your specifications is extremely satisfying. You do lose entire days thinking about bathroom tapware finishes though, which is pointless (just go chrome, high quality chrome). :D 

 

If I had the wherewithal to do that I would love to spend days thinking about bathroom tapware finishes. It suits my personality completely. I grew up on RPG games and spent days (months? years?) fine tuning character development, then later moved to a career where I spend time doing the same, just with data and algorithms. 

I've done that for too long now and I'm weary of the bureaucracy involved to get stuff done. I think I could enjoy fine tuning a home into something beautiful, as long as I could do it on my own terms and schedule.

We're currently in the process of buying/selling to a better house with a lot of scope for extending and improvement (worst house best road type thing). 

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I do not agree. All of those brutalist, semi-brutalist council towers will have some problem in the future. Not only they are bloody ugly, but concrete may start to decay at a fastest pace than previously thought. 
This is the bad, really bad I am thinking about. 
As per the detached, it depends. If they need a lot of work they will remain unsold. I see houses on the markets with pictures that could have been taken 50 years ago. 

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15 hours ago, Neapolitan said:

If Houses/Flats in a bad state, in bad areas will probably see their prices go to the the floor, if they even manage to sell. 
House/Flats in a good state, in good area, will probably see their prices go down, but around the average fall in the market. 
House/Flats in premium locations will see their price stay flat or even go up. 

Agree - but it's more than just the quality of the house build.

There will be a big divergence based on types of property and the location.

A key factor is the average loan to value in the property location. This varies hugely. 

On average over 50% of properties are owned outright (no mortgage at all) - but if you look at a good location this figure can be 60% or even higher and you can end up with very very low average loan to values.

A low loan to value means no forced sales. No forced sales means no crash in that location.

 

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2 minutes ago, Neapolitan said:

I do not agree. All of those brutalist, semi-brutalist council towers will have some problem in the future. Not only they are bloody ugly, but concrete may start to decay at a fastest pace than previously thought. 
This is the bad, really bad I am thinking about. 
As per the detached, it depends. If they need a lot of work they will remain unsold. I see houses on the markets with pictures that could have been taken 50 years ago. 

:D You went from 60s houses to brutalist (what’s semi-brutalist?) council blocks pretty fast. I’m not afraid of decaying concrete and no one I know lives in a brutalist house. I mean this one is clearly barely fit to live in 

https://www.themodernhouse.com/sales-list/outhouse/

That’s OK, that mental association is what makes UK 60s houses (which aren’t brutalist, of course) good value. I always look for value, and usually that means finding things others overlook. 

Now, what this place needs is a good amount of highly flammable aluminium composite cladding in rainbow colours to really make it liveable ?

image.jpeg.13e738aed469a7efcf98b436be46efe4.jpeg

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55 minutes ago, dugsbody said:

If I had the wherewithal to do that I would love to spend days thinking about bathroom tapware finishes. It suits my personality completely. I grew up on RPG games and spent days (months? years?) fine tuning character development, then later moved to a career where I spend time doing the same, just with data and algorithms. 

I've done that for too long now and I'm weary of the bureaucracy involved to get stuff done. I think I could enjoy fine tuning a home into something beautiful, as long as I could do it on my own terms and schedule.

We're currently in the process of buying/selling to a better house with a lot of scope for extending and improvement (worst house best road type thing). 

Worst house/best road is excellent. If you haven’t already joined I recommend Houzz website for renovation chat.

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11 minutes ago, Neitherland said:

Agree - but it's more than just the quality of the house build.

There will be a big divergence based on types of property and the location.

A key factor is the average loan to value in the property location. This varies hugely. 

On average over 50% of properties are owned outright (no mortgage at all) - but if you look at a good location this figure can be 60% or even higher and you can end up with very very low average loan to values.

A low loan to value means no forced sales. No forced sales means no crash in that location.

 

This.

Good Luck with all those HBT shoe-boxes.

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24 minutes ago, Neitherland said:

On average over 50% of properties are owned outright (no mortgage at all) - but if you look at a good location this figure can be 60% or even higher and you can end up with very very low average loan to values.

A low loan to value means no forced sales. No forced sales means no crash in that location.

 

How do you get LTV data for a street?

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20 minutes ago, Si1 said:

How do you get LTV data for a street?

I don't think you can. Although the data does exist...

There are some public national and regional figures available i believe.

My work has access to data from one of the largest mortgage provider and with that you can make some inferences at a town or equivalent sized area.

Tunbridge wells was one area which i remember stood out as having a ridiculously low average LTV - it was somewhere in the low teens.

Edited by Neitherland
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3 hours ago, PeanutButter said:

Ugly can be changed. Most people are too unimaginative to do it.

The worst I’ve experienced is asbestos, pricey to remove safely and dispose of properly, and only outlawed entirely in 1999. Mostly I’d leave it undisturbed but for full rewiring and insulating just get the artex (and whatever else) out at the same time.

60/70s housing stock in the UK is good value and it’s easier to modify to suit modern living (kitchen diners, sliding doors onto garden etc). 

I don’t love timber cladding but a nice breathable render does wonders. 

image.thumb.jpeg.be56b94dd96dff60f4f7b15850b62d30.jpeg

 

seen better more imagination 

 

daoViF.jpg

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Look at home buildings insurance......in the areas of demand the cost of rebuilding a home is a small percentage of the value of the property.....the value is the land.

Seen so many nice homes, some Victorian and Edwardian specimens demolished and new building or buildings with potential better rental or sales total built on the same piece of land......lots more concrete, less or no garden, more units, more people, more cars and parking spaces, more ground rent, more ongoing maintenance......now no longer freehold, many leaseholds.;)

Edited by winkie
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11 hours ago, Si1 said:

That's mental.

yep i watched them take the roof off all internal walls out and stick an entire floor on top of the old one.  being a 4 bed bungalow to begin with it had a decent floor plan in the first place think it was 1600-1700 so probably around 3000-3200 foot now.  no foundations to dig just a new timber roof and steel supports and interior fit out, probably got change from 200k plus purchase price of the house. 

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6 hours ago, longgone said:

yep i watched them take the roof off all internal walls out and stick an entire floor on top of the old one.  being a 4 bed bungalow to begin with it had a decent floor plan in the first place think it was 1600-1700 so probably around 3000-3200 foot now.  no foundations to dig just a new timber roof and steel supports and interior fit out, probably got change from 200k plus purchase price of the house. 

Any builders here know the rough costs of adding a new lower ground extension to an existing dwelling with no basement? 

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  • 416 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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